E-mini S&P (June)
Last week’s close: Settled at 2752, down 3.00 on Friday and down 58.25 on the week
Fundamentals: U.S benchmarks are mixed to start the week; tech is pushing the NQ green and Boeing is hammering the Dow. The leading story this morning is a crash involving Boeing’s 737 Max 8 plane operated by Ethiopian Airlines and killing all 157 on board. This is the second crash involving this new model plane and China’s aviation authority has grounded all Boeing 737 Max 8 planes. Boeing’s stock is down 10% premarket. Also developing this morning is a two-sided Retail Sales number; after an abysmal December read, January’s figures bounced back, however, December was revised lower. Lastly Fed Chair Powell has been in the spotlight. He followed up a speech Friday night with a rare interview on CBS’s 60 Minutes last night. Fed Chair Powell has continued to reiterate the Fed’s patient rhetoric as the they digest the recent interest rate hikes. He maintains that the U.S economy is in a “good place” right now and the headwinds come from overseas; slowing growth from China and Europe, trade tensions and Brexit. Powell speaks again tonight at 6:00 pm CT. As of this morning there is a 0% probability the Fed hikes rates next week and a 1.3% chance they cut (98.7% odds they don’t move).
Technicals: We are now using the June contract and our levels will tighten-up as we move into the middle of the week. Price action in both the S&P and NQ has begun to repair last week’s damage but they face strong overhead resistance in order to neutralize the healthy pullback. Most important is major three-star resistance in the S&P at 2759.75-2764.25 and with tech attempting to diverge this morning we will be watching the S&P most closely for a broader signal. The pivot aligns Friday’s settlement in the June contract with the continuous 200-day moving average and simply a close above here will be a step forward for the bull camp. However, a move back below this level and one that stays suppressed will leave the tape vulnerable to waves of selling towards the end of today’s session and into tomorrow.
Bias: Neutral/Bearish
Resistance: 2759.75-2764.25***, 2772.50-2776.25**, 2787.75**. 2796.75-2798***
Pivot: 2751.25-2752
Support: 2737.75-2741.50**, 2722-2726.50***, 2701-2706**, 2677.75-2680.75***
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